A Necessary Condition for a Separating Equilibrium When Workers Can

Multiple Choice

A necessary condition for a separating equilibrium when workers can use education as a signal of their ability is

A) the high-ability wage is larger than the sum of the degree cost plus the low-ability wage.
B) the cost of a degree is larger than the low-skill wage.
C) the high-ability wage is smaller than the low-ability wage.
D) the high-skill wage is equal to the cost of a degree.